The president of the New York-based private equity firm Warburg Pincus, Timothy Geithner, has suggested the Vietnamese government allow higher foreign ownership in commercial banks to attract more foreign investment and ease noncash payments in the country, reported the Vietnam News Agency.
Speaking at a meeting with deputy prime minister Vuong Dinh Hue in Hanoi on Tuesday, Geithner, who served as the 75th Secretary of the US Department of the Treasury from 2009 to 2013, spoke highly of Vietnam’s efforts to improve the business and investment climate and to develop financial services, such as the digital banking and online payment space.
In response, deputy PM Hue stated that the government will consider reducing the State’s holdings in a number of joint stock commercial banks to create more opportunities for private investors. Hue said Vietnam is committed to attracting foreign investors, especially in the services sector, to meet its bilateral and multilateral free trade agreements.
Those banks that will be more open to private investors include the Bank for Investment and Development of Vietnam, the Vietnam Bank for Industry and Trade, the Bank for Foreign Trade of Vietnam and the Vietnam Bank for Agriculture and Rural Development, the deputy prime minister said.
He explained that these banks that account for more than 50 percent of the total credit supply of the Vietnamese banking sector will have their State stakes lowered to 65 percent by 2025.
The government has included in the draft revised laws on investment and enterprises many stipulations on non-voting shares to enable foreign investors to increase their ownership while ensuring risks are controlled, he added.
The two bills will be on the table at the next sitting of the legislative National Assembly in May next year, according to the senior Cabinet leader.
He added that the government is also studying the issuance of regulations on the special shares to encourage the deeper involvement of private investors in State-owned enterprises and equitised banks to develop the local credit and payment systems. Those shares give shareholders veto power over changes to the company’s charter.
He urged Warburg Pincus to expand its investment in infrastructure, advanced technology, new materials, renewable energy, supporting industries and information technology.
